Updating from a higher level
This setting can be changed forward and backwards if needed, so if you do change your compatibly level and find that there are problems you can set the value back again until you resolve all of the issues that you may be facing during the upgrade.
In addition, there are certain features that only work if the database is set to the latest compatibly level, therefore to get all of the benefits of the version of SQL Server you are running you need to make sure you are using the latest compatibly level.
Java Update can only be run if the system is connected to the internet.
Alternatively, you can go to get the latest Java version.
The compatibly level setting is used by SQL Server to determine how certain new features should be handled.; microsoft.support = microsoft.support
Yes, updating to Java 7, using Auto Update or updating through the Java Control Panel, will remove the highest version of Java 6 installed.